It makes more economic sense for a company to invest $3.5 million per million pa

Question

It makes more economic sense for a company to invest $3.5 million per million pairs of capacity for a plant facilities upgrade that will boost labor productivity by 25% at whichever company plant has the lowest level of labor productivity. at whichever company plant has the lowest level of total annual compensation per employee. at a plant where total annual compensation per employees is currently $18,000 and labor productivity is about 3,000 pairs per worker as compared to a plant where total annual compensation per employee is currently $4,000 per year and labor productivity is also 3,000 pairs per worker. when the company is striving to gain a differentiation-based competitive advantage than when the company is striving to gain a low-cost competitive advantage. at large plants than at small plants.

Explanation / Answer

option C is correct.

it represents the existing conditions in the market and it helps the firms to minimize the labor cost to the produciton.

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